Canopy Growth Stock Up in Smoke After Q4 Miss

The company plans on implementing a full strategy reset in 2021

Digital Content Manager
May 29, 2020 at 9:20 AM
facebook twitter linkedin


The shares of marijuana producer Canopy Growth Corp (NYSE:CGC) have taken a serious tumble off yesterday's three-month peak, after reporting a fiscal fourth-quarter loss -- which included $743 million (Canadian) in impairment and restructuring charges -- and revenue that missed analyst expectations. Medical marijuana was the singular strong spot for CGC's fourth quarter, while recreational markets sputtered. The Canada-based company said that it plans on implementing a full strategy reset in 2021. At last check, the security is down 18.5% at $17.70.

This puts CGC right back below its 120-day moving average -- a former area of resistance the equity breezed past in its rally off the $13 level earlier this month. In fact, in the last 10 days, Canopy Growth closed in the red only twice, boasting a 35.8% monthly win, coming into today. Yesterday's rally lost steam at familiar pressure near the $22 region before pivoting back down to its mid-May levels today.

The majority of analysts are lukewarm on the pot stock. Of the 16 in coverage nine say "hold," and seven say "strong buy." Meanwhile, the consensus 12-month price target of $23.97 sits at a 10% premium to last night's close, which could leave the door wide open for price-target cuts, should today's losses hold. 

Short sellers have also been quick to jump on the bearish bandwagon. Short interest is up 12.3% in the last reporting period, representing a solid 21.1% of the stock's available float. In other words, it would take almost seven days to buy back these bearish bets at CGC's average pace of trading. 

A short-term breather could already be in the cards for Canopy Growth. This is per its 14-day Relative Strength Index (RSI) of 76, which sits firmly in "overbought" territory. 

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners